Quest Diagnostics Inc (DGX) Rises on Rumor That It Is Exploring A Sale

The shares of Quest Diagnostics are trading higher on speculations that the company engaged the services of Goldman Sachs to explore a sale.

Quest Diagnostics

The stock price of Quest Diagnostics increases more than 6% to $78.84 per share at the time of this writing around 2:08 in the afternoon in New York. In fact, the shares of Quest Diagnostics traded as high as $89 per share earlier today. The trading for the stock was briefly halted today.

Unconfirmed rumors

A report from Bloomberg indicated that the speculations that Quest Diagnostics hired Goldman Sachs to explore a merger & acquisition (M&A) deal came from a Joe Kunkle, the founder of OptionsHawk.

Kunkle clarified to Bloomberg that he was just passing along information found online. On a separate tweet, Kunkle noted that Quest Diagnostics out-of-the-money calls are “staying bid.”

Tara Lachapelle tweeted, is this $dgx and $lh stuff just an Avon sequel…” A follow-up tweet reads, “Avon part 2?” After posting those tweets, Lachapelle eventually deleted it, according to Benzinga’s Jake Mann, who noticed her tweets.

Commenting on the movement of the stock, RBC analyst Frank Morgan said, “DGX’s spike is probably just a rumor, things like this happen all the time.” He also emphasized a series of unconfirmed rumors is happening in the healthcare industry.

Quest Diagnostics credit and stock ratings

Morningstar issued a BBB+ credit rating and a 3-star stock rating for Quest Diagnostics. The credit rating suggests that the company’s default risk is moderate.

Last month, analysts at Canaccord Genuity recommended a Buy rating with an $85 price target for the shares of Quest Diagnostics. Brokerage firms covering the stock have an average Hold recommendation and a consensus price target of $76.18 per share.

Last week, the board of directors of Quest Diagnostics approved a quarterly cash dividend of $0.38 per share payable on July 22 to shareholders of record on July 8, 2015.

Last month, Quest Diagnostics reported that its adjusted earnings increased 13% to $1.05 per share, and revenue grew 5.3% to $1.84 billion for the first quarter ended March 31, 2015.